Investing in the Housing Market Can Bring Large Returns with Proper Planning by Guy Morris

As with any smart investment, proper planning is the key to a successful property flip. Successful flipping is the process of buying property, renovating or updating and then quickly selling that piece of property for a profit.
The idea is to buy the property for the lowest price, spend the least money on the renovations to make the most impact on the selling price and then sell the property at the highest possible price for the largest profit margins. There are many costs involved in the process, but smart choices and advanced planning can make a huge difference.
Many considerations go into finding the right property to flip. Location and price are the first most important factors. You want to find a house that is in an appropriate neighborhood that you will be able to update it and sell it. Look for the cheapest or most in need property in the nicest neighborhood you can afford, then make sure you can afford the fees, insurance and renovation costs for this property and that the return will be worth it. Once these benchmarks have been established, move forward - to the next set of steps.
Once you've found your diamond in the rough, find a good inspector. An inspector can professionally determine what possibly hidden needs the property may have and also what the appropriate price for the property should be based on these repairs. This way, you may be able to reduce your purchase price. An independent appraisal will be also able to help you not only determine the value of the property you are interested in, but also the comparable properties in the neighborhood. Just be certain you account for the money you are spending up front here, and add this to the total of your investment.
After you have reached an acceptable price based on your inspection, appraisal and the seller has agreed, it is time to purchase the property. Again, closing costs on a mortgage must be accounted for here and a set time should be established for the renovations to take place, so that a specific number of mortgage payments are known ahead of time and planned for accordingly. This is just like any other kind of investing, remember, so the less money you put into paying for the house to stand empty, the more money you will make in profit upon resale.
At this point you begin to depend more on others, so finding reputable, competent and fast moving contractors and subcontractors will make the biggest difference for you at this point. Specific guidelines should be set for the time frame and quality of work to be performed and a contract with diminishing returns on late work may protect an investor from a disappearing contractor.